Correlation Between MFS Municipal and Brightsphere Investment
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and Brightsphere Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MFS Municipal and Brightsphere Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Municipal Income and Brightsphere Investment Group, you can compare the effects of market volatilities on MFS Municipal and Brightsphere Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MFS Municipal with a short position of Brightsphere Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and Brightsphere Investment.
Diversification Opportunities for MFS Municipal and Brightsphere Investment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and Brightsphere is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and Brightsphere Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightsphere Investment and MFS Municipal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MFS Municipal Income are associated (or correlated) with Brightsphere Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightsphere Investment has no effect on the direction of MFS Municipal i.e., MFS Municipal and Brightsphere Investment go up and down completely randomly.
Pair Corralation between MFS Municipal and Brightsphere Investment
Considering the 90-day investment horizon MFS Municipal is expected to generate 2.92 times less return on investment than Brightsphere Investment. But when comparing it to its historical volatility, MFS Municipal Income is 2.01 times less risky than Brightsphere Investment. It trades about 0.04 of its potential returns per unit of risk. Brightsphere Investment Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,939 in Brightsphere Investment Group on August 30, 2024 and sell it today you would earn a total of 1,182 from holding Brightsphere Investment Group or generate 60.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. Brightsphere Investment Group
Performance |
| Timeline |
| MFS Municipal Income |
| Brightsphere Investment |
MFS Municipal and Brightsphere Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and Brightsphere Investment
The main advantage of trading using opposite MFS Municipal and Brightsphere Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, Brightsphere Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brightsphere Investment will offset losses from the drop in Brightsphere Investment's long position.| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |